China is the world’s largest carbon emitter and is at a critical crossroads. While the country has made significant strides in renewable energy, coal remains deeply embedded in its energy system. With a new Energy Law now in effect, many are wondering: Will this be the breakthrough policy that helps China peak carbon emissions by 2030?
China’s energy transition is a paradox. It is simultaneously the globe’s biggest polluter and a leader in renewable energy expansion. The new Energy Law aligns with China’s “1+N” framework, launched in October 2021, which outlines the nation’s long-term carbon neutrality strategy (the “1”) and specific policies to peak carbon emissions by 2030 (the “N”).
This shift marks a significant departure from China’s historical stance. In the 1990s and early 2000s, the country was largely defensive in global climate negotiations. It wasn’t until 2011, with its 12th Five-Year Plan, that China formally committed to reducing emissions, pledging a 17% reduction in carbon intensity per unit of GDP. The turning point came in 2015 when China submitted its Intended Nationally Determined Contribution (INDC) under the Paris Agreement, officially committing to peaking emissions around 2030.
Now, China is preparing to submit updated climate goals by February 2025. For the first time, these Nationally Determined Contributions (NDCs) will include an absolute carbon emissions target—a move that could bridge domestic policies with global commitments.
Coal’s Persistent Grip on China’s Energy Mix
Despite ambitious renewable energy targets, China is not letting go of coal just yet. The new Energy Law promotes the “rational development and clean and efficient use” of fossil fuels, signaling that coal will remain a crucial part of the country’s energy security strategy in the near term.
China currently operates over 1,100 coal plants, more than any other country, accounting for more than half of the world’s coal-fired power capacity. An additional 400 gigawatts (GW) of coal-fired capacity is in the pipeline. Experts suggest that coal will continue playing a key role in China’s energy mix for decades, even as renewables scale up. In fact, coal-powered electricity generation is projected to increase by 4.5% in 2025.
“Coal represents an important aspect of energy security for China even though it is aggressively deploying renewables. The key challenge is determining when China will seriously begin reducing coal use,” said Christine Loh, chief development strategist at The Hong Kong University of Science and Technology.
Another factor cementing coal’s role is China’s capacity payment system, which ensures coal plants receive financial incentives to remain operational. “The introduction of capacity charges for coal-based plants last year sent a strong signal that coal will continue supporting the system even as renewables ramp up,” said Alan Chan, senior director and head of business development (China) at power firm CLP.
However, China has also exceeded its renewable energy targets, fueling speculation that investments will continue, though at a more measured pace. “We have seen a moderation in renewable energy investment growth in 2024 due to excess capacity concerns,” said Michelle Lam, Greater China economist at French multinational bank Société Générale.
Still, China appears well on track to meet its goal of having non-fossil fuels make up 20% of energy consumption by 2025. Coal supplied 54% of China’s energy needs in 2024, pushing its carbon emissions to an all-time high of nearly 15 billion tonnes—equivalent to the emissions of 3.24 billion petrol-powered cars.
While China’s rising emissions worry climate experts, some argue that its peak could come sooner than expected, given the rapid acceleration of renewables. By mid-2024, China had already surpassed its target of 1,200 GW of combined wind and solar capacity—six years ahead of schedule. Renewables now account for about 44% of the country’s total power generation mix, reinforcing China’s position as a global clean energy leader.
China’s status as a green energy frontrunner may be further solidified by political shifts abroad. The United States, the world’s second-largest emitter, produced nearly 5 billion metric tonnes of carbon emissions in 2023, around 13% of the global total. India, in third place, emitted 2.9 billion metric tonnes. With U.S. President Donald Trump officially withdrawing from the Paris Agreement for the second time in January 2025, China’s commitment to renewables may shine even brighter on the global stage.
A New Era of Power Policies
China’s Energy Law, effective as of January 1, 2025, marks the country’s most comprehensive energy policy reform to date. It consolidates decades of fragmented policies into a single strategy, setting legal frameworks for managing both total carbon emissions and carbon intensity.
For the first time, the law mandates a minimum share of renewable energy sources—including hydropower, wind, solar, biomass, and hydrogen—in power consumption. It also lays the groundwork for a unified national power market to better integrate renewables into the grid and ensure smoother energy distribution across provinces. A preliminary framework is expected by the end of 2025, with a full-scale national power market in place by 2029—just a year before China’s carbon neutrality target.
“This is the first time China has consolidated its energy policies into a single law,” said Alan Chan. “Before, these policies existed in different legal pockets, like the Renewable Portfolio Standards (RPS) introduced in 2019. Now, they are part of a unified framework.”
China’s 34 provinces will need to coordinate closely to make this new system work. Differences in grid infrastructure and energy policies between provinces present a major challenge. “It’s like getting over 30 different countries to move in unison. The implementation will take time, and coordination will be crucial,” Chan added.
The Energy Law will also drive large-scale renewable energy installations, boosting utility-scale projects that integrate storage and grid technologies. This move could further green China’s energy consumption and help the country meet both its short- and long-term climate goals.
“This law isn’t just about energy production; it’s about consumption, too,” said Agnes Tai, director at Great Glory Investment Corporation. “China is investing in large-scale capacity installations, ensuring that renewables are not just pockets of energy but part of an integrated national system.”
With this ambitious law in place, the world is watching closely to see whether China can truly balance energy security with sustainability. If successful, it could set a powerful precedent for other nations navigating their own clean energy transitions.
Will China’s New Energy Law Finally Curb Its Coal Emissions?
China is the world’s largest carbon emitter and is at a critical crossroads. While the country has made significant strides in renewable energy, coal remains deeply embedded in its energy system. With a new Energy Law now in effect, many are wondering: Will this be the breakthrough policy that helps China peak carbon emissions by 2030?
China’s energy transition is a paradox. It is simultaneously the globe’s biggest polluter and a leader in renewable energy expansion. The new Energy Law aligns with China’s “1+N” framework, launched in October 2021, which outlines the nation’s long-term carbon neutrality strategy (the “1”) and specific policies to peak carbon emissions by 2030 (the “N”).
This shift marks a significant departure from China’s historical stance. In the 1990s and early 2000s, the country was largely defensive in global climate negotiations. It wasn’t until 2011, with its 12th Five-Year Plan, that China formally committed to reducing emissions, pledging a 17% reduction in carbon intensity per unit of GDP. The turning point came in 2015 when China submitted its Intended Nationally Determined Contribution (INDC) under the Paris Agreement, officially committing to peaking emissions around 2030.
Now, China is preparing to submit updated climate goals by February 2025. For the first time, these Nationally Determined Contributions (NDCs) will include an absolute carbon emissions target—a move that could bridge domestic policies with global commitments.
Coal’s Persistent Grip on China’s Energy Mix
Despite ambitious renewable energy targets, China is not letting go of coal just yet. The new Energy Law promotes the “rational development and clean and efficient use” of fossil fuels, signaling that coal will remain a crucial part of the country’s energy security strategy in the near term.
China currently operates over 1,100 coal plants, more than any other country, accounting for more than half of the world’s coal-fired power capacity. An additional 400 gigawatts (GW) of coal-fired capacity is in the pipeline. Experts suggest that coal will continue playing a key role in China’s energy mix for decades, even as renewables scale up. Coal-powered electricity generation is projected to increase by 4.5% in 2025.
“Coal represents an important aspect of energy security for China even though it is aggressively deploying renewables. The key challenge is determining when China will seriously begin reducing coal use,” said Christine Loh, chief development strategist at The Hong Kong University of Science and Technology.
Another factor cementing coal’s role is China’s capacity payment system, which ensures coal plants receive financial incentives to remain operational. “The introduction of capacity charges for coal-based plants last year sent a strong signal that coal will continue supporting the system even as renewables ramp up,” said Alan Chan, senior director and head of business development (China) at power firm CLP.
However, China has also exceeded its renewable energy targets, fueling speculation that investments will continue, though at a more measured pace. “We have seen a moderation in renewable energy investment growth in 2024 due to excess capacity concerns,” said Michelle Lam, Greater China economist at French multinational bank Société Générale.
Still, China appears well on track to meet its goal of having non-fossil fuels make up 20% of energy consumption by 2025. Coal supplied 54% of China’s energy needs in 2024, pushing its carbon emissions to an all-time high of nearly 15 billion tonnes—equivalent to the emissions of 3.24 billion petrol-powered cars.
While China’s rising emissions worry climate experts, some argue that its peak could come sooner than expected, given the rapid acceleration of renewables. By mid-2024, China had already surpassed its target of 1,200 GW of combined wind and solar capacity—six years ahead of schedule. Renewables now account for about 44% of the country’s total power generation mix, reinforcing China’s position as a global clean energy leader.
China’s status as a green energy frontrunner may be further solidified by political shifts abroad. The United States, the world’s second-largest emitter, produced nearly 5 billion metric tonnes of carbon emissions in 2023, around 13% of the global total. India, in third place, emitted 2.9 billion metric tonnes. With U.S. President Donald Trump officially withdrawing from the Paris Agreement for the second time in January 2025, China’s commitment to renewables may shine even brighter on the global stage.
A New Era of Power Policies
China’s Energy Law, effective January 1, 2025, marks the country’s most comprehensive energy policy reform to date. It consolidates decades of fragmented policies into a single strategy, setting legal frameworks for managing both total carbon emissions and carbon intensity.
For the first time, the law mandates a minimum share of renewable energy sources—including hydropower, wind, solar, biomass, and hydrogen—in power consumption. It also lays the groundwork for a unified national power market to better integrate renewables into the grid and ensure smoother energy distribution across provinces. A preliminary framework is expected by the end of 2025, with a full-scale national power market in place by 2029—just a year before China’s carbon neutrality target.
“This is the first time China has consolidated its energy policies into a single law,” said Alan Chan. “Before, these policies existed in different legal pockets, like the Renewable Portfolio Standards (RPS) introduced in 2019. Now, they are part of a unified framework.”
China’s 34 provinces will need to coordinate closely to make this new system work. Differences in grid infrastructure and energy policies between provinces present a major challenge. “It’s like getting over 30 different countries to move in unison. The implementation will take time, and coordination will be crucial,” Chan added.
The Energy Law will also drive large-scale renewable energy installations, boosting utility-scale projects that integrate storage and grid technologies. This move could further green China’s energy consumption and help the country meet both its short- and long-term climate goals.
“This law isn’t just about energy production; it’s about consumption, too,” said Agnes Tai, director at Great Glory Investment Corporation. “China is investing in large-scale capacity installations, ensuring that renewables are not just pockets of energy but part of an integrated national system.”
Navigating an Uncertain Future
China’s clean energy push is not just about reducing emissions—it’s also a key driver of economic growth. In 2023, the country’s renewable energy sector, led by solar power, electric vehicles, and battery manufacturing, contributed approximately US$1.6 trillion to the economy, accounting for 40% of all investment growth.
However, economic uncertainties loom. While China’s GDP grew by around 5% in 2024, geopolitical tensions could pose risks. U.S. President Donald Trump’s second-term policies, including potential 10% tariffs on Chinese imports, could impact trade and technology sectors.
Meanwhile, China is also tightening corporate environmental accountability. New sustainability reporting guidelines, effective May 1, 2024, require all 457 listed companies to disclose emissions data and environmental impact, aligning with international standards. However, reporting remains incomplete—companies are only mandated to disclose direct and indirect emissions (Scope 1 and 2), while supply chain emissions (Scope 3) remain voluntary.
As China balances economic growth, energy security, and climate commitments, the question remains: Can it transition away from coal fast enough to meet its ambitious targets? The coming years will be critical in determining whether the world’s largest emitter can also become its most influential climate leader.